Making it hurt

The local taxing authorities in and around Portland love to beat the taxpayers up. They're way meaner than the state or federal government. Part of the reason is that most of the local tax collection, including the taxes of Multnomah County and the weird Metro layer of government, is performed by City of Portland bureaucrats. As anyone can tell you, those folks tend to be arrogant.

But the politicians are not much nicer. A couple of weeks ago, the Multnomah County commissioners demonstrated this as they dithered about their infernal "preschool for all" (yeah, right) income tax. The two sane commissioners had the idea to give the taxpayers a slight break, but no, that was too much to ask. They were slapped down, as usual, by the others on the board, including the guy who's been faxing it in. Off to "further study" the proposal went. 

Austin De Dios of the O explained it pretty well here.

Under the current tax, which voters passed in 2020, individuals pay 1.5% on any income they make over $125,000. That same rate applies to any income couples make over $200,000. That tax rate jumps to 3% on income over $250,000 for individuals and over $400,000 for joint filers....

Commissioner Julia Brim-Edwards asked the board Thursday to amend the preschool tax so that the income threshold is pegged to inflation. She argued that taxes and wages are regularly adjusted for inflation and that it would make sense to apply a similar system to the preschool tax to prevent undue strain on people whose wages have less purchasing power over time.

“It’s a fairly standard mechanism that’s included in lots of different tax measures,” Brim-Edwards said.

While her proposal was struck down in a 2-2 vote, with Commissioner Lori Stegmann absent from the Thursday meeting, the board agreed it should consider the proposal again after more research is done.

Commissioner Jesse Beason, who voted with Vega Pederson to kill the amendment, said it didn’t make sense to adopt the adjustment until the county’s analysts make sure it won’t lessen available preschool seats.

What baloney. Just do it! The feds and the state have been making automatic adjustments like this every year for something like 40 years.  But heaven forbid that Multnomah County do the right thing by the taxpayers.

What $125,000 bought in January 2021, when the tax started, costs $150,428.93 today. People who had incomes below the threshold when the tax was first instituted shouldn't have to start paying just because a cost-of-living raise pushed them over the dollar amount in the original tax. It's just common-sense tax policy.

But of course, this is the Multnomah County commission we're talking about.

Another nasty feature of the county tax, and also of the twin black hole known as the Metro homeless tax, is that for a lot of taxpayers, the pound of flesh has to be sent in quarterly.  If not, the taxpayers are socked with penalties. One day recently, we received not one but two separate letters from the City of Portland reminding us of this.

Ugh. Pure torture infllicted by the sadists at the city revenue bureau, who drafted both these taxes. The time value of money that the government gets from quarterly payments can't be enough to justify persecuting the taxpayers this way. And think of how much additional bureaucracy is needed to process four times as many payments as is really necessary. Not to mention the burden on the taxpayer's employer, which has to do withholding if the employee asks or if the employee's wages are over a specified amount.

It doesn't have to be this way. Tri-Met, the local transit agency (and gigantic money suck), has a self-employment tax. They don't require quarterly payments, because it's not worth the hassle. But then, they have their tax collection done by the state revenue department, which tends to be reasonable, if slightly incompetent, most of the time. Once you turn the revenuing over to Portland City Hall, you're basically breaking out the waterboards.

It really is no wonder that smart people with money are fleeing Portland, and that no one wants to set up a business here. Have you been to Lake Oswego? It's really nice.

In addition to adopting JBE's inflation indexing proposal, the county (and Metro) should drop the quarterly payment malarkey, as of yesterday. And they need to tell the City Hall geniuses to put away the thumbscrews. You candidates for the county commission, start talking.

As for Tri-Met, before you hand them any medals for reasonableness, keep in mind that their $400 income threshhold for the self-employment tax has been the same since the early or mid-1980s. What $400 bought in January 1985 now costs $1,193.54. 

If you're outraged enough that you want to vote those bums out, I have bad news for you. The Tri-Met board is not elected. It's appointed by the governor. But she's been babbling about tax relief lately; maybe give her a call.